Formated Set A

Session – 2021-22
PERIODIC TEST - II SET A

GRADE –XII
SUBJECT : ECONOMICS Date: 13OCTOBER 2021

DURATION : 90 Minutes Maximum Marks: 40
_____________________________________________________________________________
General Instructions:
1-There are a total 60 questions in this paper out of which 50 questions are to be
attempted.
2-This paper is divided into three Sections:
(a) Section A – Contains 24 questions. Attempt any 20 questions.
(b) Section B – Contains 24 questions. Attempt any 20 questions.
(c) Section C – Contains 12 questions. Attempt any 10 questions.
3-All questions carry equal marks.
Section- A
(20 Questions out of 24 questions are to be attempted)
1- _______is not an example of capital expenditure of the government.

(a) Repayment of borrowings (b) Construction of metro lines.
(c) Maintenance of Street Lights (d) Investments done abroad.
2- Which of the following is not a component of Current Account of BOP?

(i) Export of Machinery.
(ii) Increased Foreign Institutional Investments in India.
(iii) Rent received from a building in USA.
(iv) Addition of foreign exchange in governmental reserves.
(a) (i) and (ii) (b) (ii) and (iv) (c) Only (ii) (d) (i), (ii) and (iii).
3- Which of the following does not make RBI as a banker to the government
(a)It accepts receipts and makes payments on the behalf of the
government.
(b) It advises the government on various financial and monetary matters.
(c) It gives the power to the central bank to control the money supply the
economy.
(d) It advances loans to the government.
4- Which of the following is categorized as Accommodating Transaction?

(a) Export of Machinery.
(b) Borrowings from abroad to cover the excess expenditure on current
account.
(c) Grants received for earthquake victims from USA.
(d) Investments done abroad.
5- Read the following statements carefully and choose the correct

alternative from the following:
Statement-1 – Demonetization was the step taken by the Government of
India in order to tackle the problems of corruption, black money,
terrorism and circulation of fake currency in the Indian Economy.
Statement-2- Demonetization has ensured improved tax compliance in
India over the period of time.
Alternatives:
(a) Both the statements are true.
(b) Both the statements are false.
(c) Statement 1 is true and Statement2 is false.
(d) Statement 2 is true and Statement 1 is false.
6- Ms. Preeti, an economics teacher, was explaining the concept of

‘minimum percentage of the total deposits to be kept by any commercial
bank with themselves, as per norms and statute prevailing in the country’.
From the following, choose the correct alternative which specifies
towards the concept explained by her?
(a) Cash Reserve Ratio. (b) Repo Rate.
(c) Bank Rate. (d) Statutory Liquidity Ratio.
7- Exchange rate between Indian Rupee and US dollar has changed from
71.49 (November,2020) to 72.82 (January 2021) through changes in
market forces of demand and supply. The above mentioned statement was
given by Sidhi, identify the type of exchange rate system was she talking
about?
(a) Fixed Exchange Rate. (b) Floating Exchange Rate
(c) managed Floating Exchange Rate (d) Managed Fixed Exchange Rate.

Statement-1: Higher value of fiscal deficit creates an alarming situation
for the economy as a whole.
Statement-2: Fiscal Deficit indicates the borrowing requirements of the
government.
Alternatives:
(c) Statement 1 is true and Statement 2 is false.
9- Under the Balance of Payments structure of a nation, the two main
categories of accounts for the classification of the transactions are____
and______. (Fill up the blank with correct alternative)
i. Current account. ii Unilateral transfer account.
iii Capital Account. iv Loan account.
Identify the correct alternative from the following:
Alternatives:
(a) i and ii (b) i and iii
(c) iii and iv (d) iv and i.
10- “In 2016, RBI declared currency notes of Rs.500 and Rs1000, no longer a
legal tender”. This function of RBI is called as _________. This process
is called as __________.
(a) Bank of Issue, Remonetisation (b) Financial Advisor, Demonetization
(c) Bank of Issue, Demonetization (d) Financial Advisor, Remonetisation.
11- _______ was set up for the development and promotion of small- scale
industries in India.
(a) Karve Committee
(b) Tapas Mojumdar Committee
(c) Village and Small Scale Industries Committee
(d) Both (a) and (c)
12- Subsidies are ________

(a) Taxes imposed on the quantity of goods and services imported or
exported
(b) Quantitative restrictions imposed on the import and export of
goods and services.
(c) Benefits given by government to producers in order to encourage
the production.
(d) Minimum price at which produce will be sold in the market.
13- Productivity refers to _______.

(a) Total output produced
(b) Output produced per hectare of land.
(c) Total production by employing by different factors of production.
(d) None of the above.
Statement-1: Urban poverty is considered to be a spill-over of rural
poverty.
Statement-2: People from rural areas migrate to urban areas in search of
better job opportunities and better standard of living.
Alternatives:
Statement-1: India adopted Inward looking trade strategy in the period
1950-1990.
Statement-2: Self-Sufficiency was one of the long- term objectives India.
Alternatives:
16- Golden revolution was introduced in the year _______ for increasing the
production and productivity of ______.
(a) 1991, Food Crops. (b) 1991, Horticulture Crops.
(c) Mid of 1960’s Food Crops. (d) 1960, Horticulture Crops.
17- From the following given sets of statements in Column I and Column II,
choose the correct pair of statements.
COLUMN I COLUMN II
A Exports of goods and services i Excess of Exports of goods
over the Imports of goods.
B Trade Surplus ii An element of invisible items.
C Current Transfers to rest of the iii Recorded as a positive item in
world the BOP account.
D Portfolio Investments iv Foreign Institutional Investors.
Alternatives:
(a) A-i. (b) B-ii. (c) C-iii. (d) D-iv.
18- RTE stands for _______ and was introduced in the year______
(a) Right to education, 2009. (b) Right to educate, 2008.
(c) Right to Education, 2006. (d) Right to Educate, 2010.
19- The Government of India has decided to construct more no. of hospitals.
This would be categorized as _______.
(a) Revenue nature income. (b) Capital nature expenditure.
(c) Revenue nature expenditure. (d) Capital nature income.
20- Jobless growth refers to growth which is ______.

(a) Employment driven. (b) Technology driven.
(c) Both (a) and (b) (d) Neither (a) or (b).
21- When total Deposits created in the economy are Rs50,000 with value of
LRR as 10%, the value of initial deposits are ______.
(a) Rs2,000 (b) Rs5,000 (c) Rs10,000 (d) Rs20,000.
22- Which of the following was not the feature of Indian Demographic
Profile?
(a) Death Rate was low. (b) Birth Rate was high.
(c) Low life expectancy. (d) High infant mortality rate.
alternatives given below:
Statement-1: Planning Commission was set up in the year 1950.
Statement-2: Indian Economy on the eve of Independence was backward
and stagnant. There was a need for planning process.
Alternatives:
24- Prior to India’s Independence, the stagnation in the agricultural sector

was mainly caused by _____.
(a) Investment in technology. (b) Investment in agriculture facilities.
(c) Advanced infrastructural facilities. (d) Land settlement system.
Section-B
25- Read the following statements-Assertion (A) and Reason (R)

carefully and choose the correct alternatives given below:
Assertion (A): Appreciation and Revaluation of Domestic Currency with
respect to foreign currency are one and the same thing.
Reason (R): Appreciation and Revaluation of domestic currency make
the domestic goods relatively expensive. As a result, decrease in exports
and increases in imports of the nation are observed.
Alternatives:
(a) Both Assertion (A) and Reason (R) are true and Reason (R) is the
correct explanation of Assertion (A).
(b) Both Assertion (A) and Reason (R) are true and Reason (R) is not the
(c) Assertion (A) is true but Reason (R) is false.
(d) Reason (R) is true but Assertion (A) is false.
26- The value of CRR is 8% and SLR is 12%. If the initial deposits in the
economy is Rs2000, the values of Money multiplier and Total deposits
are____and______respectively,
(a) 10 and 20,00 (b) 5 and 10,000
(c) 10 and 10,000 (d) 5 and 20,000

Assertion (A): Land Reforms aimed at bringing equity in the agriculture
sector.
Reason (R): Policy of “Land to tillers” was introduced to encourage the
farmers to continue the cultivation.
Alternatives:
28- Identify the incorrect statement from the following:

(a) Diversification in agriculture sector provides sustainable livelihood
rural population.
(b) Diversification includes- change in cropping pattern, shift of
workforce from agriculture to other allied activities and non-
agriculture sector.
(c) Objective of investment in new agriculture avenues (non- farm
activities) increases financial risks for the rural population.
(d) Diversification reduces the proportion of unemployed population in
the rural areas to considerable limits.
Assertion (A): Human Capital Formation is a stock concept.
Reason (R): Stock refers to the variables which are measured at a
particular point of the time.
Alternatives:
30- Match the following:

COLUMN I COLUMN II
1. National Horticulture a. 1982

Mission
2. Operation Food b. 1991
3. Green Revolution c. 2005-06
4. Golden Revolution d. 1960
5. NABARD e. 1995
Alternatives:
(a) 1-c, 2-e,3-d,4-b, 5-a. (b) 1-d,2-e, 3-c,4-a,5-b
(c) 1-e, 2-c, 3-d, 4-b, 5-a. (d) 1-c, 2-e, 3-b,4-d,5-a.
31- On the basis of given diagram below, identify which had largest poverty
level as compared to other states in 1973.
(a) Bihar, West Bengal, Gujarat and Uttar Pradesh.
(b) Bihar, West Bengal, Odisha and Madhya Pradesh.
(c) Rajasthan, Madhya Pradesh, Bihar and Uttar Pradesh.
(d) Andhra Pradesh, Rajasthan, West Bengal and Tamil Nadu.
32- On the basis of information below, find out the change in life expectancy
(Male) between 1951 and 2016-17.
Alternatives --
(a) 80.10% (b) 78.1% (c) 79.2% (d)77.0%
33- Read the following statements- Assertion (A) and Reason (R)
Assertion (A): India became self-sufficient in food grain production.
Reason (R): Focus of the planning was on development of industries of
strategic significance.
Alternatives:
alternatives given below:
Statement-1: Government initiated various measures to improve the
marketing system in agriculture.
Statement-2: Prior to Independence, farmers experienced a problem of
distress sale, lack of transportation and storage.
Alternatives:
35- Read the following statements- Assertion (A) and Reason (R),
Assertion (A): Stock of money with the commercial banks is a part of
money supply.
Reason(R) : Gross demand deposits are not a part of money supply.
Alternatives:
correct explanation of Assertion (A)
36- Arrange the following event in the correct chronological order.

(i) Establishment of Tata Iron and Steel Company (TISCO).
(ii) Suez Canal.
(iii) Year of Great divide.
(iv) Battle of Plassey.
Alternatives:
(a) iv, iii, ii, i (b) iii, iv, i, ii, (c) iv, ii, i, iii, (d) i, iii, iv, ii
Assertion (A): Trade of invisible items between two nations is a part of
capital account of Balance of Payment.
Reason (R): Transaction that affects the asset-liability status of a country
in relation to the rest of the world are known as Capital Account
transaction.
Alternatives:
38- High Powered money includes _______and________.
(i) Currency. (ii) Demand deposits. (iii) Reserves. (iv) Post-office
saving.
Alternatives:
(a) (i) and (ii) (b) (i) and (iii) (c) (ii) and (iii) (d) (i) and (iv)
Assertion (A): There was expansion in farm and non-farm output,
income and employment in rural areas.
Reason(R): Formal Banking System ensured smooth delivery of credit
since 1969.
Alternatives:
Assertion (A): Since agriculture in India is dependent on rainfall, the
income of farmers is unstable.
Reason(R): Due to agricultural diversification, Horticulture, fisheries and
cottages industries have gained popularity among rural India.
Alternatives:
Assertion (A): Higher the values of money Multiplier, larger amount of
total deposits are created in the economy.
Reason(R): There exists an inverse relation between legal reserve
requirements and money multiplier.
Alternatives:
42- Choose the correct alternative to be filled in given blank A
Process of Capital Formation

Generate Savings
INVESTMENT
(a)Hoard savings. (b) Procure Savings.

(c) Mobilise Savings. (d) Increase Income.
43- Mr. Aman has started a new business venture, he intends to spend a huge
amount towards ‘on-the-job training’ of his workers before putting them
to work. It exhibits the right step in the direction of Human Capital
Formation.
Spot which of the following does not directly contribute to the process of
human capital formation buy Mr. Aman
(a) Adds skills and expertise. (b) Improves efficiency
(c) Ensures gender equity (d) Increase output productivity.
44- Suppose that the Balance of Trade (BOT) of a nation exhibits a surplus of
Rs20, 000 cores. The import of merchandise of the nation is half of the
exports of merchandise to the rest of the world. The value of exports
would be Rs______.
(a) 30,000 (b) 40,000 (c) 24,000 (d) 35,000.
Statement-1: Concept of absolute poverty is used to identify the number
of poor people in the country.
Statement-2: Poverty Line is expressed in terms of per capita income
and per capita calorie consumption.
Alternatives:
46- Which of the following is a advantage of WTO?

(a) Promotes competition in the international market.
(b) Facilitates bilateral as well as multilateral trade agreements among the
member countries.
(c) Promotes free trade in the international market by removing tariff and
non-tariff barriers
(d) All of these.
47- Identify the correct statement from the following:

(a) Restrictive policies of commodity production, trade and tariff
pursued by the colonial government adversely affected the
structure, composition and volume of India’s foreign trade.
(b) Effective trade policies of commodity production, trade and
tariff pursued by the colonial government favorably affected the
(c) Liberal policies of commodity production, trade tariff pursued
by the colonial government adversely affected the structure,
composition and volume of India’s foreign trade.
(d) Restrictive policies of commodity production, trade and tariff
pursued by the colonial government favorably affected the
48- Match the situations given in Column I with their respective implications
given in Column II:
COLUMN I COLUMN II
A Migration i. Reduce in per capita economic

growth
B Low level of academic ii. Imbalance between demand

standards and supply of human resource
C Population-High Growth rate iii. Brain Drain
D Lack of proper manpower iv. Mismatch between required

planning skill and academic standards.
(a) A-ii; C-iv; D-i (b) A-iii; B-iv; C-i; D-ii

(c) A-i; B-ii; C-iii; D–iv; (d) A –ii; B-iv; C-i; D-iii;
SECTION –C
No. 49-54 are to be answered on the basis of the following data:
CREDIT (RECEIPTS) DEBIT (PAYMENTS)
Items Rs.in Items Rs in core
core
1. Merchandise trade (goods 200 8. Merchandise trade (goods 300
exported) imported)
2. Services exported 100 9. Services exported 200
3. Income from foreign 200 10. Foreign income from 200
investments investment at home.
4. Unilateral receipts 100 11. Unilateral payments 100
CAPITAL TRANSACTIONS
5. Long-term borrowings. --- 12. Long-term lending’s 80
6. Short-term borrowings. 100 13. Short-term lending’s 60
7. Sale of gold/ assets. 100 Purchase of gold/assets 60
49- The current account shows a deficit of Rs_____ core.

(a) 150 (b) 200 (c) 250 (d) 300
50- The value of long-term borrowings should be equal to Rs_______ crore

so as to balance both the sides.
(a) 100 (b) 150 (c) 200 (d) 250
51- The measurement of balance of payments deficit is based on:

(a) Autonomous transactions (b) Accommodating transactions
(c) Current account transactions (d) Capital account transactions.
52- Identify the formula to calculate Balance of Trade.

(a) Exports (goods) – Imports.(goods)
(b) Imports – Exports.
(c) Exports- Net factor income from abroad.
(d) Economic transactions- Imports.
Statement-1: Foreign exchange inflow is recorded at credit side.
Statement-2: Outflow of foreign exchange is recorded at debit side of
Balance of Payment.
Alternatives:
54- The value of balance of trade for the given year, would be
Rs______core.
(a) 100 (b) -100 (c) 200 (d) 400
Q.No. 55-60 are to be answered on the basis of the following data:

*To dismantle the vast network of controls and permits that dominated
the economic system.
* To redefine the role of the state as a facilitator of economic transactions
and as a neutral regulator rather than the primary provider of goods and
services.
* To move away from a regime of import substitution and to integrate
fully with the global trading system. The 1991 reforms unleashed the
energies of Indian entrepreneurs and gave untold choice to the consumers
and changed the face of the Indian Economy.
The reform agenda constituted a paradigm shift, and has defined the
broad contours of economic policymaking for three decades.
Liberalization was adopted as the guiding principle of governance and all
governments since 1991, have broadly stuck to that path.
Today we don’t need a paradigm shift. We need to look at individual
sectors and see which one of these needs, reforms to create a competitive
environment and improve efficiency. The power sector, the financial
system, governance structures and even agricultural marketing needs
reforms.
Today’s reforms also require much more discussion and consensus-
building.
The central government needs to work in tandem with state governments
and consult different stakeholders impacted by reform decisions. Timing
and sequencing are critically important in the new reform’s agenda.
55- According to the given text,______ was adopted as the guiding principal
of governance and all governments since 1991.
(a) Modernization (b) Liberalisation
(c) Privatization (d) Globalization.
Statement-1: 1991 was a landmark moment in India’s post-independence
history as that changed the nature of the economy in fundamental ways.
Statement-2: India’s economic establishment launched a multipronged
reforms agenda to repair India’s macroeconomic balance sheet and ignite
growth.
Alternatives:
Assertion (A): India’s pre-1990 economic strategy dismantles the vast
network of controls and permits that dominated the economic system.
Reason(R):The 1991 reforms unleashed the energies of Indian
entrepreneurs, gave untold choice to consumers and changed the face of
the Indian economy.
Alternatives:
58- In the light of the given text and common knowledge, identify the
incorrect statement:
(a) A severe balance of payments problem triggered an acute economic
crisis in 1991.
(b) In 1991, the economic and political leadership launched a
multipronged reforms agenda to repair the macroeconomic
situation of the nation.
(c) In post 1991 situation, the state was given the role of primary
regulator the economy.
(d) Post pandemic, individual sectors should be looked closely. Sectors
that need reforms should be identified and corrective action should
be taken.
Statement-1: Timing and sequencing are critically important in the post-
economic reform agenda.
Statement-2:Post pandemic reforms in India require a paradigm shift.
Alternatives:
Assertion (A): The 1991 reforms released the vitalities of Indian business
persons.
Reason(R): The reform agenda established a paradigm shift and defined
the broad outlines of economic policy making for years to come.
Alternatives:

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Session – 2021-22

PERIODIC TEST - II SET A

SUBJECT : ECONOMICS Date: 13OCTOBER 2021

1- _______is not an example of capital expenditure of the government.

2- Which of the following is not a component of Current Account of BOP?

4- Which of the following is categorized as Accommodating Transaction?

5- Read the following statements carefully and choose the correct

6- Ms. Preeti, an economics teacher, was explaining the concept of

8- Read the following statements carefully and choose the correct

12- Subsidies are ________

13- Productivity refers to _______.

20- Jobless growth refers to growth which is ______.

24- Prior to India’s Independence, the stagnation in the agricultural sector

25- Read the following statements-Assertion (A) and Reason (R)

27- Read the following statements-Assertion (A) and Reason (R)

28- Identify the incorrect statement from the following:

30- Match the following:

1. National Horticulture a. 1982

36- Arrange the following event in the correct chronological order.

42- Choose the correct alternative to be filled in given blank A

Process of Capital Formation

(a)Hoard savings. (b) Procure Savings.

46- Which of the following is a advantage of WTO?

47- Identify the correct statement from the following:

A Migration i. Reduce in per capita economic

B Low level of academic ii. Imbalance between demand

C Population-High Growth rate iii. Brain Drain

D Lack of proper manpower iv. Mismatch between required

(a) A-ii; C-iv; D-i (b) A-iii; B-iv; C-i; D-ii

49- The current account shows a deficit of Rs_____ core.

50- The value of long-term borrowings should be equal to Rs_______ crore

51- The measurement of balance of payments deficit is based on:

52- Identify the formula to calculate Balance of Trade.

Q.No. 55-60 are to be answered on the basis of the following data:

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